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Asian business leaders call for deeper regional economic integration

Kyodo | Monday, March 15, 2010

Asian business leaders call for deeper regional economic integration

Asian business leaders on Monday called for deeper economic integration in the region through trade and investment liberalization, saying vibrant Asian demand will drive global economic growth.

Representatives of 13 private-sector organizations from 11 Asian economies, including China, India, Singapore and South Korea, gathered in Tokyo for a one-day Asian Business Summit, hosted for the first time by the Japan Business Federation, commonly known as Nippon Keidanren.

’’The wind for economic growth has shifted from the West to the East on the back of this major financial crisis,’’ Keidanren Chairman Fujio Mitarai said at a joint press conference following the summit. ’’As the world economy recovers, the Asian economies — with their huge growth potential — need to exercise leadership.’’

In a set of recommendations compiled in a joint statement, the Asian business leaders called for the removal of ’’foreign capital restrictions and opaque domestic regulations’’ for smoother flow of goods, services and personnel.

In addition to deregulation, it also called for the early conclusion of the Doha Round of global trade liberalization talks under the World Trade Organization.

’’We remain committed to free trade and firmly opposed to protectionist approaches,’’ it said.

Japan’s biggest business lobby has been pushing for economic integration within the rapidly growing Asian region, as Japan turns to its neighbors to lift its own economy as it combats deflation.

Japan already has a free trade agreement with the 10-member Association of Southeast Asian Nations, its first FTA with a regional bloc. But challenges also loom with the country still in the preliminary stages of studying a trilateral FTA with China and South Korea.

At the outset of the summit, Foreign Minister Katsuya Okada said Japan will work to accelerate economic partnership agreement talks with Australia, India and South Korea.

Mitarai has also been actively making trips to Asian countries, including Indonesia, Singapore, Thailand and Vietnam, in the months leading up to the business summit.

With his term set to expire in May, the event marked one of Mitarai’s final initiatives to boost private-sector cooperation in cementing Japan’s economic ties with neighboring Asian countries.

’’We would like to fill the holes (in free trade agreements) as quickly as possible,’’ Mitarai said.

Among the participants, Hari Bhartia, incoming president of the Confederation of Indian Industry, said, ’’The challenge for us to increase the internal consumption in our own local economies.’’

Teng Theng Dar, chief executive officer of the Singapore Business Federation, highlighted the importance of building regional supply chains in order for Asian economies to contribute to the world economic recovery.

In addition to trade, the joint statement called for cooperation between governments and the private sector in developing key regional infrastructure including transportation such as roads and railways, electricity and water-related facilities.

Participants also noted the importance of financial infrastructure such as settlement systems and rating agencies so that the region can engage more in trading of bonds and stocks, and encouraged the expansion of the Chiang Mai Initiative, a network of bilateral currency swap deals among Asian countries.

The statement also touched on the need to establish legal systems and frameworks to protect intellectual property rights.

The recommendations were later submitted to Prime Minister Yukio Hatoyama, who promised to study and incorporate them at international conferences such as the Asia-Pacific Economic Cooperation forum summit to be hosted by Japan later this year.

 source: Kyodo News